IRS relief for missed allocations of GST exemption.

• Author: Sherr, Eileen
• Position: Generation skilling transfer tax

In Rev. Proc. 2004-46, the Service issued guidance allowing taxpayers to apply for relief for missed allocations of the generation-skipping transfer (GST) tax exemption in a simplified format, under certain limited circumstances and if certain conditions are met. Generally, the relief applies to transfers that occurred before 2001 and were within the gift tax annual exclusion amount. The simplified format allows the taxpayer to file Form 709, United Stales Gift (and Generation-Skipping Transfer) Tax Return, for the year in question (whether or not that form was previously filed for that year) and attach a notice of allocation showing the relief requested.

Many situations involving girls to irrevocable life insurance trusts may meet the procedure's restrictions. In contemplating the new procedure, tax advisors should be looking for trusts (e.g., life insurance trusts) that were overlooked for GST purposes, yet are intended to benefit multiple generations and receive annual...